Is there any reason for a one participant plan sponsored by a sole proprietor to NOT have a 401(k) feature nowdays instead of being a basic profit sharing plan?

Just for instance...

IF the sole prop has any intention of hiring employees and doesn't want to mess with it.

Possible additional document revision/confusion/fees. For example, Congress passes something specific to 401(k) only, which requires an amendment to be adopted. If sole prop isn't interested in using the (k) feature to start with, he may have to pay for an amendment to a provision he didn't need/want in the first place.

There may be other reasons - this is all I could think of off the top of my head.

If his comp is large enough and if he is not worried about protection from creditors, I would recommend a SEP.

SEP won't work because they don't want the custodial diligence/oversight of all the prohibited transactions, er . . I mean "investments."

If the contributions aren't higher for a (k), why are solo 401(k) such a rage if a profit sharing plan gets solos to the same place. I figured that I was missing something.

Alf -- Are you just comparing a "solo" 401(k) to a profit sharing plan - with the advantage of the "solo" 401(k) being that 401(k) contributions are not subject to 404 deduction limits. So if a solo practitioner's earnings aren't high enough to get a full $42,000 415 limit (if because 404's limit of 25% of earnings is less than $42,000), then he can contribute part as 401(k) contributions and avoid the 404 deduction limit? If the person makes over $208,000 then he doesn't appear to need a solo 401(k). But I agree it's probably not a bad idea to have it in place so he's already set up if he has a bad year. But then it kind of depends on how the company is set up (W-2 v self employment income) because that affects the timing of the election and withholding of deferrals. Too late if he is a corp with W-2 wages and realizes at year end that he needs to make a large 401(k) deferral but doesn't have much earnings left from which to withdraw them.

Plus, even with enough comp to get the $42,000/25% limit- if he is at least age 50 by the end of the year, he can add catch-up of $4,000 under the k-plan